The network, which has absorbed investment worth 24 billion yuan (US$2.9 billion), is regarded as China Unicom's biggest ever gamble for its future development.

"The CDMA network started a new episode in China's telecom history. It will soon become the world's biggest network with a capacity of 50 million users in 2003," said Yang Xianzu, chairman of China Unicom.

The network covers 330 cities nationwide and has a capacity of 15.2 million users, Yang said.

The technology China Unicom adopted is a counterpart of GSM (global system for mobile communications), which now supports all of China's 145 million mobile phone users. Most of the CDMA patents are owned by Qualcomm, a US-based technology firm.

Compared with GSM mobile phones, CDMA provides high voice quality, low radiation and high security.

"CDMA's potential users will be the high- and middle-end users who really care about voice quality, radiation and security," Yang said. Yet he also conceded that CDMA is facing heavy marketing pressure since most high- and middle-end users already own a mobile phone and are customers of Unicom's rival, China Mobile.

CDMA users will not save any money. The company will charge a 50 yuan (US$6) monthly fee and 0.40 yuan (5 US cents) per minute for air time - the same rate that China Mobile charges.

But the company may soon introduce some package services, which would give customers more choice and a flexible charging system, said a senior manager at China Unicom.

China Unicom's chairman said 500,000 people registered last month for CDMA mobile phones. Yet industry insiders worry customers may not get the phones immediately since most CDMA terminal makers have not started large-scale production yet. Many of the 19 licensed mobile phone makers are adopting a wait-and-see attitude. They want to make sure the market demand is big and then start large-scale production.

The competition between the two companies increased when the number of mobile phone users hit 10 percent of the population and attracting new users therefore became difficult.

(China Daily January 9, 2002)